UPDATE 4:00pm CT: Dratel wrote to Ars, saying: "Ross will be pleading not guilty at the arraignment. The indictment was expected and does not contain any new factual allegations. We look forward to beginning the discovery process and preparing Ross’s defense."

In the 12-page indictment, which was published on Tuesday, the government re-iterates much of what was in the original complaint from October 2013. This indictment comes from a grand jury, which has essentially accepted the accusations first outlined in the earlier complaint.

Prosecutors accuse Ulbricht of orchestrating the Silk Road, which "was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over a hundred thousand buyers worldwide, and to launder hundreds of millions of dollars deriving from these unlawful transactions."

Beyond the accusations of helping to sell drugs—including heroin, cocaine, LSD, methamphetamine, and other substances—the government also included accusations of "computer hacking." The indictment mentions that the Silk Road “provided a platform for the purchase and sale of malicious software designed for computer hacking, such as password stealers, keyloggers, and remote access tools.”

An accompanying press release mentions that approximately 173,991 bitcoins, worth more than $150 million at present exchange rates, have been seized in the course of the investigation. The bitcoins on Silk Road servers were ordered to be forfeited in January. Ulbricht is contesting the forfeiture of those bitcoins, the US Attorney reports.

Soooo... no attempted-murder-for-hire related charges. I smell a plea bargain.

And yet the hacking charges remain. While it's important to not underestimate the damage Silk Road may have helped facilitate, by making the sale of malware possible, it still seems a little backwards to me.

Soooo... no attempted-murder-for-hire related charges. I smell a plea bargain.

He's still being charged with the murder-for-hire -- see page five of the linked 12-page indictment in the article.

Furthermore, a plea bargain wouldn't have removed one charge from an indictment while leaving others...

And he really has nothing to plea with. They already have all the Silk Road server info, so they don't need him to rat out others by testifying against them. They also have what seems to be a rock solid case against him, so they wouldn't be tempted to plea out to a lesser charge just to avoid trial. Toss in the additional desire to "send a message" and this is guaranteed to go to jury.

The indictment mentions that the Silk Road “provided a platform for the purchase and sale of malicious software designed for computer hacking, such as password stealers, keyloggers, and remote access tools.”

Not trying to take sides in this case or go off topic or anything, but to say that remote access tools are "designed for computer hacking" is too broad of a statement. Sure, they can be and often are used for nefarious purposes, but more commonly used for remote assistance and troubleshooting.

The indictment mentions that the Silk Road “provided a platform for the purchase and sale of malicious software designed for computer hacking, such as password stealers, keyloggers, and remote access tools.”

Not trying to take sides in this case or go off topic or anything, but to say that remote access tools are "designed for computer hacking" is too broad of a statement. Sure, they can be and often are used for nefarious purposes, but more commonly used for remote assistance and troubleshooting.

Sure. But if you're buying them on silk road, I'm fairly sure they're of the more nefarious, stealth variety.

Soooo... no attempted-murder-for-hire related charges. I smell a plea bargain.

He's still being charged with the murder-for-hire -- see page five of the linked 12-page indictment in the article.

Furthermore, a plea bargain wouldn't have removed one charge from an indictment while leaving others...

And he really has nothing to plea with. They already have all the Silk Road server info, so they don't need him to rat out others by testifying against them. They also have what seems to be a rock solid case against him, so they wouldn't be tempted to plea out to a lesser charge just to avoid trial. Toss in the additional desire to "send a message" and this is guaranteed to go to jury.

I wouldn't count on it going to jury. Only something like 3% of all federal cases end up going to trial, the rest are plea bargained before they ever reach a jury.

Can't pay taxes if they're not a capital gain. They're not a capital gain until they're converted into USD.

Incorrect: The BTC would fall under bartering income in the year in which they were received, with the amount reported in USD at "fair market value" exchange rate at that time. http://www.irs.gov/taxtopics/tc420.html

The further capital gain, if the price went up before converting them to USD, would be the difference between that fair market value and the proceeds received, counting as income in the year when they were eventually sold.

Nitpicker here... thanks for the great article, but I do have a question about the idea that bitcoins are worth x amount of dollars based on an exchange rate.

Is there any buyer out there, anywhere, who would be willing to spend 150 million dollars to buy that amount of bitcoins?

If there is no buyer, then there is no market, and if there is no market, there is no market value... just wondering who such a buyer would be?

Im saying this beacuse of the 2008 crash,.... many banks were caught in this trap of holding massive amounts of 'computerized financial stuff' (Synthetic Collateralized Debt Obligations) that was of dubious actual market value...

He [allegedly] managed to operate for years with public media coverage of the Silkroad before they tracked him down. Yeah he seems to have made mistakes that eventually tripped him up but if true that he pulled this off mainly himself he earned "mastermind".

Soooo... no attempted-murder-for-hire related charges. I smell a plea bargain.

He's still being charged with the murder-for-hire -- see page five of the linked 12-page indictment in the article.

Ahhhh... I stand corrected. (I'm not entirely certain if that link was there when I read this originally, or if it was added by the update... but it makes no difference, as I wouldn't have had time to click on embedded links anyway, at that particular moment.)

Regardless of how all this plays out, it seems like a given that he would be pleading not guilty... but yeah, they pretty much established an air-tight case against him the moment he logged into the "Dread Pirate Roberts" account from a public library. Brazen... and foolish. He screwed himself.

It always amazes me more of these guys don't realize they're eventually going to get caught. If they were smart they would flee to a foreign country that doesn't like the US Government as soon as it's financially viable.

How is it the government can confiscate and then sell off Ulbricht's Bitcoins before he's been convicted? What if he's found not guilty (as unlikely as that seems)? Wouldn't the government have to return that property?

How is it the government can confiscate and then sell off Ulbricht's Bitcoins before he's been convicted? What if he's found not guilty (as unlikely as that seems)? Wouldn't the government have to return that property?

I believe that the bitcoins they are auctioning off were found on the site itself, and not Ross's personal account. There are a bunch of other bitcoins that he holds personally that aren't part of this auction.

How is it the government can confiscate and then sell off Ulbricht's Bitcoins before he's been convicted? What if he's found not guilty (as unlikely as that seems)? Wouldn't the government have to return that property?

I believe that the bitcoins they are auctioning off were found on the site itself, and not Ross's personal account. There are a bunch of other bitcoins that he holds personally that aren't part of this auction.

There are two lots of them. The smaller, that are going to be auctioned are as you describe. A larger wallet that is his own was seized [ultimately for auction] but he is contesting that. This article mentions both of them, the $150m number being the sum of both.

It always amazes me more of these guys don't realize they're eventually going to get caught. If they were smart they would flee to a foreign country that doesn't like the US Government as soon as it's financially viable.

Are you better off in any of those places? I doubt it. How do you explain to your mom that you are moving to <not friendly to the US> for business reasons, especially if you feel like you are getting away with whatever would drive the need to move?

It always amazes me more of these guys don't realize they're eventually going to get caught. If they were smart they would flee to a foreign country that doesn't like the US Government as soon as it's financially viable.

Are you better off in any of those places? I doubt it. How do you explain to your mom that you are moving to <not friendly to the US> for business reasons, especially if you feel like you are getting away with whatever would drive the need to move?

Blinded by greed.

There is that somewhat shady SlySoft out there in the Bahamas. If Mom retires to Florida, it is a shorter trip than say coast to coast.

It always amazes me more of these guys don't realize they're eventually going to get caught. If they were smart they would flee to a foreign country that doesn't like the US Government as soon as it's financially viable.

More accurately, you would need to move to a country in which operating a drug market and ordering assassinations is legal AND doesn't have an extradition country where such things are not. Alternatively, you would need to move to a country where the authorities are very bribe-able.

Nitpicker here... thanks for the great article, but I do have a question about the idea that bitcoins are worth x amount of dollars based on an exchange rate.

Is there any buyer out there, anywhere, who would be willing to spend 150 million dollars to buy that amount of bitcoins?

If there is no buyer, then there is no market, and if there is no market, there is no market value... just wondering who such a buyer would be?

Im saying this beacuse of the 2008 crash,.... many banks were caught in this trap of holding massive amounts of 'computerized financial stuff' (Synthetic Collateralized Debt Obligations) that was of dubious actual market value...

Someone looking to sell that amount isn't looking for one buyer. This is basic stuff here...

"he's looking to sell a literal ton of cocaine... how will he find an addict looking for that much?"

The problem isn't that there's no one person looking, the problem is that you think they're looking for ONE person.

Foolish. Completely foolish. What could have motivated this guy to log into his account in a public library? I thought it was kind of common sense to not log into nefarious profiles on a public computer?

Foolish. Completely foolish. What could have motivated this guy to log into his account in a public library? I thought it was kind of common sense to not log into nefarious profiles on a public computer?

It wasn't a public computer, it was his laptop. It also sounds like he was in the book aisles. Presumably trying to do it somewhere that no one could overlook what he was doing. He was prob trying to not do it from his home network, but instead from a network that had hundreds of different people using it.

Nitpicker here... thanks for the great article, but I do have a question about the idea that bitcoins are worth x amount of dollars based on an exchange rate.

Is there any buyer out there, anywhere, who would be willing to spend 150 million dollars to buy that amount of bitcoins?

If there is no buyer, then there is no market, and if there is no market, there is no market value... just wondering who such a buyer would be?

Im saying this beacuse of the 2008 crash,.... many banks were caught in this trap of holding massive amounts of 'computerized financial stuff' (Synthetic Collateralized Debt Obligations) that was of dubious actual market value...

Nitpicker here... thanks for the great article, but I do have a question about the idea that bitcoins are worth x amount of dollars based on an exchange rate.

Is there any buyer out there, anywhere, who would be willing to spend 150 million dollars to buy that amount of bitcoins?

If there is no buyer, then there is no market, and if there is no market, there is no market value... just wondering who such a buyer would be?

Im saying this beacuse of the 2008 crash,.... many banks were caught in this trap of holding massive amounts of 'computerized financial stuff' (Synthetic Collateralized Debt Obligations) that was of dubious actual market value...

Looks like Bitstamp does around $5M of volume each day. Add in a bunch of other exchanges, and you're at around $10M/day. So you could safely liquidate $150M in bitcoins in a few months.

I'm not sure about "safely". The US authorities hold just over 14% of all bitcoin currently in circulation. Heck, they are currently the single largest "investor" and holder of bitcoins. Divesting themselves at any speed will move the market. The other thing to note is that a lot of the trading on exchanges like bitstamp occur within the system and the volume traded is very different from the volume of money flowing in or out of the system at any time.

One thing I'm slightly curious about is whether the seizure of all these bitcoins (which were in active circulation at the time they were seized unlike a large chunk of the currently outstanding bitcoins) on the 25th of October helped drive the price spike which kicked in in November. What may have been the vast majority of bitcoins in circulation were taken straight of of the supply side of things.

[edit] Look at the mtgox chart showing plenty of USD volume despite the fact that people have had serious issues withdrawing any US balances for months, one of the reasons why the mtgox price is ~$100 than the bitstamp one. These charts are not a good reflection of how much money you could take out of the system.

Soooo... no attempted-murder-for-hire related charges. I smell a plea bargain.

He's still being charged with the murder-for-hire -- see page five of the linked 12-page indictment in the article.

The mention of murder-for-hire is not one of the counts he is being charged with. It is in support of the other charges. Recall that the original murder-for-hire charge came out of Maryland and not New York. I have not heard that the two jurisdictions have merged the case, so the Maryland indictment, at the moment, still contains an actual murder-for-hire charge.

why the hacking charge? are they saying he's responsible for remote axis softwarez? can't i buy those on ebay or advertise them on tv? they're all rats imo.

why was the .doj link dismissive about the 6 murder for hire? was the murder solicitation via fbi entrapment protocols or was it picked up from spying on ulbrichts comms? i suppose feds dont want a public jury trial to disclose how shady fbi entrapment has become, especially when over 100,000 people who enjoyed the free market capitalism provided by this entrepreneur may pay attention.

it's time for sentencing reform - this guy gets more time incarcerated than the Vietnam kid selling access to the Equifax database. (55 years vs 45) & i bet whoever hacked target will face less time than this aspiring entrepreneur who took middle man violence & leaving your house OUT of the drug equation.

is there a specific word for when the law machine drags ppl into jail on all these absurd charges, and then drop all but one, & maybe pleas out? because, really, look at that rap sheet, would you want jurors to read that shit?

...so congress just outlawed bitcoin as a financial instrument right? how's that mesh with them doing an asset seizure on his collection? nevermind, i already know the gubmint is a d d i c t e d to doing all of the above. and it's working, ulbricht can't find drugs in prison!